Whitehead Oil Co. v. City of Lincoln

• Decision Date: 23 February 1990
• Docket Number: No. 88-390,88-390
• Citation: Whitehead Oil Co. v. City of Lincoln, 234 Neb. 527, 451 N.W.2d 702 (Neb. 1990)
• Parties: WHITEHEAD OIL COMPANY, a Corporation, and Milton E. Whitehead, Appellants, v. CITY OF LINCOLN, Nebraska, a Municipal Corporation, Appellee.
• Court: Nebraska Supreme Court

Page 702

451 N.W.2d 702

234 Neb. 527

WHITEHEAD OIL COMPANY, a Corporation, and Milton E. Whitehead, Appellants, v. CITY OF LINCOLN, Nebraska, a Municipal Corporation, Appellee.

No. 88-390.

Supreme Court of Nebraska.

Feb. 23, 1990.

Syllabus by the Court

1. Zoning: Ordinances: Licenses and Permits. A landowner has no vested right in the continuity of zoning in a particular area so as to preclude subsequent amendment, and a zoning regulation may be retroactively applied to deny an application for a building permit even though the permit could lawfully have issued at the time of application.

2. Zoning: Ordinances: Licenses and Permits. A new zoning ordinance will not have retroactive effect where an applicant has substantially changed position in good-faith reliance upon the existing zoning by causing substantial construction to be made or by incurring substantial expenses related to construction.

3. Zoning: Ordinances. A zoning ordinance may not, without providing a reasonable plan for discontinuance, operate retroactively to deprive a property owner of previously vested rights by preventing a use to which the property was put before enactment of the prohibitory ordinance.

4. Zoning: Ordinances: Licenses and Permits. Where a zoning authority is guilty of misconduct or bad faith in its dealings with the applicant for a use permit in accordance with the then existing zoning regulation or arbitrarily and unreasonably adopts a new regulation in order to frustrate the applicant's plans for development rather than to promote the general welfare, the new regulation may not be applied retroactively.

5. Summary Judgment. Summary judgment is properly granted when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there exists no genuine issue as to any material fact or as to the ultimate inferences that may be drawn from the material facts and that the moving party is entitled to judgment as a matter of law.

William G. Blake, of Pierson, Fitchett, Hunzeker, Blake & Loftis, Lincoln, for appellants.

William F. Austin, Lincoln City Atty., for appellee.

HASTINGS, C.J., and BOSLAUGH, CAPORALE, SHANAHAN, GRANT, and FAHRNBRUCH, JJ.

CAPORALE, Justice.

Plaintiffs-appellants, Whitehead Oil Company and its major stockholder, Milton E. Whitehead, raising no constitutional issues, assign error to the factual and legal analyses embodied in the district court's sustainment of defendant-appellee City of Lincoln's motion for summary judgment in this action which challenges Lincoln's denial of plaintiffs' request for the land-use permit described hereinafter. We affirm as to Milton E. Whitehead and reverse and remand for further proceedings as to Whitehead Oil.

At the time Whitehead Oil purchased the subject property, it was located in a G-1 planned commercial district. In 1979, the property was rezoned and placed in a B-2 planned neighborhood business district. Such a district permits, once Lincoln issues a land-use permit, the construction and operation of retail stores, automobile wash facilities, and service stations. Lincoln Mun.Code §§ 27.31.030 and 27.31.040 (1984).

On October 27, 1986, plaintiffs applied for a land-use permit which would allow development of the property for use as a convenience retail store, for the sale of gasoline, and for a carwash.

The Lincoln planning director recommended to the planning commission and council that the permit be denied for the reasons that the proposed use involved the improper placement of gasoline pumps and a canopy in "part of the required front yard" and the improper placement of driveways immediately adjacent to residential uses. Thereafter, plaintiffs modified the use proposal in accordance with recommendations and comments made by the planning director, including the elimination of the proposed carwash. The planning director then recommended approval of the proposed use.

Meanwhile, in January 1987, a representative of the local neighborhood association filed an application to rezone the subject and certain other property in the vicinity, from within the B-2 district to within an O-3 office park zoning district. The neighborhood representative's change of zone application specifically notes that it was submitted "in order that no retail activity (including convenience stores) be allowed, only office space use." Neither service stations nor retail convenience stores are permitted in O-3 zoning districts. Lincoln Mun.Code §§ 27.27.020 and 27.27.030 (1985).

On January 28, 1987, the planning commission voted to delay action on plaintiffs' application for a land-use permit pending review of the neighborhood representative's request for a rezoning of the property. Lincoln concedes that the delay was "for the purpose of preventing the [plaintiffs'] use permit from being issued before action could be taken on the [neighborhood representative's] requested change of zone."

Plaintiffs protested the planning commission's delay of action on their permit application to the council, and the council, pursuant to plaintiffs' request, ordered the planning commission to forward its recommendation concerning plaintiffs' permit application. On February 18, 1987, the commission recommended approval of the plaintiffs' application.

At this point, the planning director and council delayed hearing on the planning commission's recommendation in order "to allow the change of zone [requested by the neighborhood representative] to proceed through the Planning Commission." Plaintiffs deny Lincoln's claim that after April 6, 1987, any "delay in further consideration of and action upon Plaintiffs' use permit application occurred with the affirmative concurrence of Plaintiffs' representative in such delay."

On June 1, 1987, the council adopted an ordinance rezoning the district in which the subject property is contained, as requested by the neighborhood representative, and then denied plaintiffs' permit application. The property remains vacant.

Milton Whitehead stated by affidavit that prior to June 1, 1986, Whitehead Oil spent approximately $2,000 in the creation of plans for the development of the property in accordance with the permit application, approximately $2,968.01 in the revision of such plans, and approximately $10,200 in attorney and other professional fees and expenses which were directly related to obtaining approval from Lincoln of the land-use permit application. Whitehead further asserted that he remained ready at all times since October 27, 1986, to begin construction immediately upon Lincoln's approval of the application.

We begin our analysis by noting that so far as the record reveals, Whitehead Oil is the sole owner of the property in question. Milton Whitehead's interest in the matter arises solely by virtue of his position as Whitehead Oil's majority stockholder. However, that position does not give him a legal interest in the permit application at issue, and, thus, whatever the situation may be as to Whitehead Oil, the summary judgment as to him is correct and is hereby affirmed.

Whitehead Oil's position is that because it filed its permit application before the change of zone was proposed by the neighborhood representative or adopted by Lincoln, it had acquired a vested right to use the subject property in a manner consistent with the zoning in effect at the time of the filing. Thus, it asserts that the rezoning of the district in which its property is located may not operate retroactively to require the denial of its application.

Whitehead Oil contends that, as have some other states, we adopted such a rule in City of Milford v. Schmidt, 175 Neb. 12, 120 N.W.2d 262 (1963). In that case, Schmidt requested a permit from the City of Milford to place a trailer home on property within the city. The city denied Schmidt's request even though at the time there existed an ordinance which permitted issuance of the permit. Schmidt nevertheless placed the trailer home on the property and began using it. The city thereafter enacted an ordinance which precluded Schmidt's use of the property for placement of a trailer home. The city then filed an action to enjoin Schmidt from continuing to maintain the trailer on his property. The trial court entered judgment for Schmidt, and the city appealed, arguing that the lower court erred in finding Schmidt could maintain the trailer on the property without a permit from the city. We upheld the trial court's implicit determination that Schmidt's application for a permit was timely made, and the refusal to issue a permit was an abuse of discretion or an arbitrary action on the part of the city council. We further held that because the zoning ordinance which prohibited the use of Schmidt's property for placement of a trailer home did not become operative until after Schmidt had attempted to get the permit and had already placed the trailer home on his property, the subsequent zoning ordinance "could have no retroactive effect on Schmidt" to "divest Schmidt of his interests under the previous code provision." Id. at 19, 120 N.W.2d at 266.

The decision in City of Milford relies on the fact that Schmidt had...